With the launch of Payment Abstraction, Chainlink enhances user experience by providing a more streamlined way to pay for its services.
What is Payment Abstraction
Chainlink has introduced the Payment Abstraction system, allowing clients to pay for network services using various digital assets such as gas tokens and stablecoins. The system automatically converts user tokens into LINK, the native Chainlink token, making payment processes more accessible.
How Chainlink Payment Abstraction Works
Payment Abstraction operates through specific steps that convert user payments into LINK tokens efficiently. Initially, users can pay with various tokens, which are then consolidated onto a single blockchain like Ethereum. These are automatically converted into LINK using DEXs such as Uniswap, and further distributed to service providers.
First Application: Chainlink Smart Value Recapture
One of the first applications of Payment Abstraction is the Chainlink Smart Value Recapture (SVR). This mechanism allows DeFi applications to recapture non-toxic Maximal Extractable Value (MEV) generated from using Chainlink Data Feeds. DeFi protocol Aave is the first to integrate this system.
Chainlink's Payment Abstraction is a significant move towards simplifying network interaction, enhancing economic sustainability, and laying the groundwork for future growth.
